International Trade Highlights:

On August 27, the USDA Economic Research Service (ERS) and USDA FAS published the quarterly Outlook for U.S. Agricultural Trade. According to the report, during the fiscal year (FY) 2016, U.S. agricultural exports are forecast at $138.5 billion, down from $139.5 billion in 2015. Exports of livestock products in 2016 are predicted to total $19.3 billion, up 3.8 percent over 2015. Beef and veal exports during 2016 are expected to equal 800,000 MT, valued at an unchanged record of $6.2 billion, as prices are expected to moderate. The 2015 estimate is 800,000 MT, valued at $6.2 billion as demand remains weak in principal U.S. markets. During 2016, pork exports are forecast at 1.8 MMT, with a value of $5.1 billion, as larger volumes more than offset lower unit values. The 2015 estimate is 1.6 MMT, valued at $4.8 billion. Beef and pork variety meat exports during 2016 are expected to total 800,000 MT, valued at $1.7 billion. The 2015 estimate is 800,000 MT, valued at $1.7 billion. During FY 2016, U.S. agricultural imports are predicted to total a record $122.5 billion, up from $115.5 billion in 2015. During 2016, the U.S. is expected to import $14.0 billion of livestock and meat. This is 6.7 percent less than 2015. Imports of cattle and calves during 2016 are expected to total 2.2 million head, with a value of $2.5 billion. The 2015 estimate is 2.3 million head, with a value of $2.6 billion. During 2016, swine imports are forecast to total 5.1 million head and are estimated to value $300 million. Swine imports during 2015 are predicted to equal 5.5 million head, with a value of $400 million. U.S. imports of fresh beef and veal during FY 2016 are forecast at 1.0 MMT, with a value of $6.3 billion. During 2015, fresh beef and veal imports are estimated at 1.2 MMT, with a value of $7.1 billion. U.S. imports of fresh pork during 2016 are forecast at 400,000 MT, with a value of $1.4 billion. The 2015 estimate is 500,000 MT, with a value of $1.6 billion. To view the entire report, visit the ERS website at http://www.ers.usda.gov/.

Oceania:

Recently, Australia’s Department of Agriculture, Fisheries and Forestry (DAFF) published Australia’s red meat export numbers for August 2015. During August, Australia exported 17,552 MT of lamb. Although this was 2.1 percent more than the previous month, it was 2.2 percent less than August 2014. Lamb exports to the Middle East during August fell 2.9 percent from July to 5,976 MT. However, this was 21.3 percent higher than August 2014. Year-to-date lamb exports to the Middle East totaled 46,831 MT, which was 14.9 percent higher than a year ago. The Middle East was the main lamb export market for Australia with 30.7 percent of the total. Australia’s lamb exports to the U.S. during August equaled 3,673 MT. This was up 23.1 percent over the previous month and was up 5.2 percent over August 2014. Total year-to-date lamb exports to the U.S. were 5.5 percent greater than last year, amounting to 30,982 MT. During August, Australia exported 2,307 MT to China, which was 6.8 percent more than the previous month. However, this was 26.6 percent less than August 2014. Year-to-date lamb exports to China totaled 20,854 MT, 20.0 percent less than a year ago. Overall, Australia’s total year-to-date lamb exports reached 152,737 MT, slightly higher than the same period a year ago. Meanwhile, during August, Australia exported 9,291 MT of mutton. Although this was up 8.3 percent over the previous month, it was down 15.0 percent from August 2014. During August, Australia exported 3,101 MT of mutton to the Middle East. This was 4.1 percent more than the previous month but was 9.4 percent less than August 2014. Year-to-date mutton exports to the Middle East totaled 33,535 MT, which was 2.2 percent lower than a year ago. The Middle East was the primary mutton export market for Australia with 35.5 percent of the total. During August, Australia’s mutton exports to China fell 4.9 percent from July to 1,102 MT. Also, this was down 54.4 percent from August 2014. Year-to-date mutton exports to China were 38.3 percent less than last year, amounting to 17,724 MT. Mutton exports to Malaysia during August equaled 848 MT, which was 4.3 percent lower than the previous month and was 21.4 percent lower than August 2014. Total year-to-date mutton exports to Malaysia equaled 9,769 MT, nearly 1.0 percent more than last year. Overall, Australia’s total year-to-date mutton exports equaled 94,415 MT, which was 17.1 percent below the same period a year ago.

During August, Australia exported 106,010 MT of beef and veal, which was down 12.8 percent from the previous month and was down 5.2 percent from August 2014. More specifically, exports of frozen beef totaled 72,834 MT, which accounted for 68.7 percent of the total exports. Exports of fresh, chilled beef totaled 27,161 MT. During August, Australia’s beef exports to the U.S. equaled 39,866 MT. This was 10.0 percent less than the previous month but was 6.5 percent more than August 2014. Year-todate beef exports to the U.S. were 36.5 percent greater than last year, amounting to 311,305 MT. The U.S. was Australia’s main beef export market with 35.6 percent of the total. Australia’s beef exports to Japan during August fell 15.1 percent from the previous month and 22.5 percent from August 2014 to 20,971 MT. Total year-to-date beef exports to Japan equaled 187,487 MT, which was 1.1 percent above a year ago. During August, Australia exported 12,020 MT of beef to South Korea. This was down 20.1 percent from the previous month and was down 1.0 percent from August 2014. Year-to-date beef exports to South Korea totaled 105,845 MT, 7.9 percent more than a year ago. Overall, Australia’s total year-to-date beef and veal exports equaled 874,264 MT, which was 6.9 percent greater than the same period a year ago. To obtain additional red meat data for Australia, visit the DAFF website at http://www.daff.gov.au/.

Pacific Rim:

The Korea International Trade Association (KITA) published South Korea’s beef and pork import data for July 2015. According to the numbers, during July, South Korea imported 27,021 MT of beef. This was 12.8 percent higher than June but was 5.5 percent lower than July 2014. More specifically, imports of frozen beef equaled 22,334 MT, which comprised 82.7 percent of the total. Imports of fresh, chilled beef equaled 4,687 MT. Beef imports from Australia during July rose 7.4 percent over the previous month and 7.4 percent over July 2014 to 15,992 MT. Total year-to-date beef imports from Australia were 7.8 percent above last year, amounting to 96,608 MT. Australia was the leading provider of beef to South Korea with 58.1 percent of the total imports. During July, South Korea imported 9,119 MT of beef from the U.S. This was up 20.4 percent over the previous month but it was down 16.5 percent from July 2014. Total year-to-date beef imports from the U.S. equaled 55,833 MT, 9.1 percent less than last year. Beef imports from New Zealand during July rose 45.6 percent over the previous month to 1,799 MT. However, this was 24.8 percent lower than July 2014. Year-to-date beef imports from New Zealand were 15.8 percent lower than last year, amounting to 11,809 MT. Overall, South Korea’s total year-to-date beef imports equaled 166,347 MT, which was nearly unchanged from the same period a year ago. In the meantime, during July, South Korea imported 50,222 MT of pork, which was the highest single month volume since May 2011. This was up 38.1 percent over the previous month and was up 43.6 percent over July 2014. South Korea’s pork imports from the U.S. during July equaled 14,231 MT, which was slightly lower than the previous month but was 69.4 percent higher than July 2014. Year-to-date pork imports from the U.S. totaled 88,750 MT, which was 26.5 percent above a year ago. The U.S. was South Korea’s main source for pork imports with 31.7 percent of the total. Pork imports from Germany during July rose 76.6 percent over the previous month and 10.6 percent over July 2014 to a record 9,006 MT. Total year-to-date pork imports from Germany were 43.9 percent greater than last year, amounting to 48,494 MT. During July, South Korea imported a record of 7,300 MT of pork from Spain. This was 163.2 percent higher than the previous month and was 91.0 percent higher than July 2014. Year-to-date pork imports from Spain totaled 37,041 MT, 128.3 percent more than last year. Overall, South Korea’s total year-to-date pork imports equaled 279,889 MT, which was 36.7 percent above the same period a year ago. Additional data on South Korea’s red meat trade is available on the KITA website at http://www.kita.org/.

North America:

On August 21, USDA NASS published its monthly Cattle on Feed report. According to the numbers, cattle and calves on feed for the U.S. slaughter market for feedlots with a capacity of 1,000 or more head totaled 10.00 million head on August 1, 2015. This was 2.6 percent higher than one year ago but was slightly lower than two years ago. The number of cattle placed on feed during July fell nearly 1.0 percent from one year ago and fell 8.1 percent from two years ago to 1.55 million head. Also, this was the lowest placements for the month of July since the series began in 1996. More specifically, placements of feeder cattle weighing less than 600 pounds totaled 365,000 head, which was 14.1 percent less than a year ago. Placements weighing 600 to 699 pounds were down 9.6 percent from last year, totaling 235,000 head. Placements weighing 700 to 799 pounds equaled 327,000 head, which was 7.6 percent lower than last year. Finally, placements weighing more than 800 pounds were 19.2 percent more than a year ago, amounting to 620,000 head. In the meantime, fed cattle marketings during July equaled 1.73 million head. This was down 3.5 percent from one year ago and was down 12.4 percent from two years ago. Also, this was the lowest marketings for the month of July since the series began in 1996. The complete report can be found on the NASS website at http://www.nass.usda.gov/.

Recently, Statistics Canada published Canada’s Livestock Estimates, July 1, 2015. According to the numbers, on July 1, 2015, Canada’s cattle inventory equaled 13.01 million head. This was 2.1 percent lower than one year ago and was 3.8 percent lower than two years ago, continuing the decline in the cattle herd. The majority of Canada’s cattle herd was located in the province of Alberta with 5.30 million head, or 40.8 percent of the total inventory. Alberta’s cattle inventory was 2.8 percent less than a year ago. Combined the provinces of Alberta and Saskatchewan contained 8.02 million head of cattle, which was 61.6 percent of Canada’s total cattle inventory. This was 3.6 percent lower than last year. The number of beef cows totaled 3.79 million head, which was down 3.4 percent from one year ago and was down 4.3 percent from two years ago. The number of heifers over 12 months fell 1.6 percent from one year ago and fell 3.0 percent from two years ago to 2.2 million head. As of July 1, farms with cattle and calves numbered 82,050. This was down a little from one year ago and was down 1.5 percent from two years ago. During the first half of 2015, Canada’s cattle slaughter totaled 1.21 million head, which was 10.2 percent lower than one year ago and was 4.7 percent lower than two years ago.

Canada’s hog and pig inventory on July 1, 2015 equaled 13.23 million head. This was up slightly over the previous report and was up 1.1 percent over a year ago. The province with the greatest hog and pig inventory was Quebec with 4.28 million head, or 32.3 percent of the total. Quebec’s inventory was up a little over a year ago. Canada’s breeding inventory totaled 1.23 million head. This was a slightly higher than the previous report and was slightly higher than a year ago. On July 1, Canada’s pig inventory equaled 12.00 million head. This was a little higher than the previous report and was 1.2 percent higher than a year ago. The number of sows farrowed during the first half of 2015 totaled 1.28 million head, which was up 1.6 percent over a year ago. Pigs born during the first half numbered 15.87 million head, 2.8 percent higher than a year ago. On July 1, 2015, there were 6,995 hog farms, which were slightly lower than one year ago and was 1.4 percent less than two years ago. Canada’s hog slaughter during the first half of 2015 equaled 9.97 million head, 2.4 percent higher than one year ago and slightly higher than two years ago.

As of July 1, 2015, Canada’s total sheep and lamb herd equaled 1.07 million head. This was down 2.1 percent from one year ago and was down 4.6 percent from two years ago. The largest concentration of Canada’s sheep herd was in the province of Ontario with 329,000 head, or 30.6 percent of the total. This was unchanged from a year ago. The province with the second greatest number of sheep was Quebec with 260,000 head, or 24.2 percent. During the first half of 2015, Canada’s sheep slaughter totaled 81,492 head, which was 2.3 percent lower than one year ago and was 1.8 percent lower than two years ago. To obtain all the complete Canada livestock inventory reports, go to the Statistics Canada website at http://www.statcan.gc.ca/.

On August 20, the USDA National Agricultural Statistics Service (NASS) released its semi-annual reports, U.S. and Canadian Cattle and U.S. and Canadian Hogs. According to the data, as of July 1, 2015, total cattle and calves in the U.S. and Canada equaled 111.41 million head. This was 1.7 percent greater than one year ago. However, there is no comparison for two years ago since USDA NASS did not collect the data. Cows and heifers that have calved totaled 44.52 million head, which was 1.5 percent more than last year. The beef cow inventory was up 1.8 percent over a year ago, totaling 34.29 million head. The combined calf crop during 2014 equaled 38.51 million head, slightly more than 2013. In the meantime, the total hog and pig inventory for the U.S. and Canada equaled 80.13 million head. This was 7.3 percent higher than one year ago and was 2.8 percent higher than two years ago. The number of hogs kept for breeding totaled 7.15 million head. This was up 1.1 percent over one year ago and up slightly over two years ago. Market hogs equaled 72.97 million head, which was 8.0 percent more than one year ago and was 3.0 percent more than two years ago. The number of sows farrowed totaled 6.96 million head, which was up 2.0 percent over one year ago and was up 1.2 percent over two years ago. The combined pig crop of both countries totaled 72.61 million head, which was 7.9 percent above one year ago and was 2.5 percent above two years ago. To obtain the entire reports, which are a joint effort between NASS and Statistics Canada, visit the NASS website at http://www.nass.usda.gov/.

On August 21, the USDA National Agricultural Statistics Service (NASS) released its monthly Cold Storage. According to the report, as of July 31, 2015, beef in U.S. cold storage facilities totaled 455.1 million pounds, which was 4.7 percent more than last year. Also, this was 23.7 percent more than the five year average. Specifically, boneless beef in cold storage was up 26.7 percent over a year ago, amounting to 416.4 million pounds. The volume of beef cuts in cold storage was 1.6 percent lower than a year ago, totaling 38.7 million pounds. Meanwhile, pork in cold storage at the end of July equaled 635.2 million pounds. This was up 28.1 percent over last year and was up 19.1 percent over the five year average. The volume of hams in storage equaled 206.8 million pounds. This was 38.9 percent more than a year ago. Pork bellies in cold storage totaled 23.6 million pounds, which was 63.4 percent lower than last year. The volume of loins in storage was 40.2 percent higher than last year, amounting to 34.0 million pounds. Pork ribs in cold storage totaled 75.6 million pounds, 37.1 percent more than a year ago. Pork butts in cold storage equaled 23.1 million pounds, which was 9.6 percent higher than last year. The volume of trimmings in cold storage increased 4.2 percent over last year to 44.2 million pounds. The volume of veal in U.S. cold storage was down 2.6 percent from a year ago, totaling 3.9 million pounds. Lamb and mutton in cold storage equaled 39.1 million pounds, which was 15.0 percent higher than last year. To obtain the complete report, visit the NASS website at http://www.nass.usda.gov/.

South America:

Brazil’s Poultry Situation

PRODUCTION

USDA FAS Brasilia forecasts domestic broiler production to increase 5% to reach 13.5 million metric tons (MMT) in 2016. Post adjusted 2015 production estimates higher. The increases reflect current expectations of producers to continue adjusting supply and demand for broilers and to respond to higher world demand for Brazilian product, especially in light of the impacts of Avian Influenza in several countries. The devaluation of the Brazilian Real (BRL) of nearly 30% this year in combination with reduced feed costs has made Brazilian products highly competitive in the world market. However the main constraint affecting next year’s forecast is the current economic recession of the Brazilian economy. With higher beef prices, broiler meat remains the most affordable animal protein as consumer purchasing power is affected by rising inflation and high levels of indebtedness of Brazilian consumers in general.

CONSUMPTION

Domestic consumption of broiler meat is forecast to increase 2% in 2016 by Post despite the current economic recession in Brazil. Consumers are shifting preferences from beef to broiler meat as prices of beef are high. However major constraints include rising inflation and high indebtedness of Brazilian consumers, slowing further increases in domestic consumption.

TRADE

Post forecasts broiler meat exports to rise 5% in 2016. Expansion is likely to be driven by the continued devaluation of the Brazilian Real and the continued impact of Avian Influenza in several world markets. Post increased exports of broiler meat in 2015 by 5% (using USDA methodology, otherwise, total exports of broiler and products may be over 11%).

According to news wires, some sources with the Brazilian Animal Protein Association (ABPA) indicated Brazilian broiler meat exports reached a new record in July 2015 (447,200 tons) surpassing the record set in June 2015 (395,200 tons).

Significant increases in exports this year are mostly attributed to 2 factors: devaluation of the Brazilian Real (30% only in 2015) and the impact of the Avian Influenza (AI), mostly in the US export markets. Brazil also benefits from its disease free status. Additionally, Brazil has recently opened new markets for broiler meat in the following: Pakistan, Malaysia, Myanmar, and Mexico (re-authorization for exports until 2016). It is also working to open other markets like Indonesia, despite the WTO case against the country. Brazil is able to export to 158 countries, though 70% of all poultry exports are concentrated in 10 markets.

China. Brazilian poultry meat exports to China have increased significantly this year due to AI in the US, the devaluation of the Brazilian Real, and the increased number of Brazilian plants approved to export to China. According to Gain Report BR0974, 29 plants are currently approved with as many as 40 to be potentially approved by late 2015. Brazilian exporters anticipated China to become Brazil’s 2nd largest export markets by the end of 2016 surpassing Japan and following Saudi Arabia. In contrast, exports to Hong Kong fall making Hong Kong Brazil’s 5th largest export market. Overall, total agricultural exports to China have increased since 2000, especially so in the last 5 years for poultry, oilseeds, vegetable oil, cotton, and sugar. Despite seeing export growth for more than 3 decades to China some sources are predicting more growth to moderate moving forward and Brazilian exports will slow as a result, especially with the declines in China’s stock markets. Poultry exports specifically are anticipated to see slower rates of growth as well in future.

Mexico, Chile, and Cuba. Brazilian exporters are optimistic about these 3 markets, mostly Mexico, which offers a potential of over 200,000 MT in light of the Avian Influenza situation in the US. Brazil is negotiating to increase the number of poultry plants to Mexico by the end of the year.

Pakistan, Malaysia, and Myanmar. These 3 new markets offer a potential of more than 50,000 MT,according to Brazilian exporters. South Korea and South Africa. Both are now among the top 10 market destinations of Brazilian broiler meat exports and local traders expect higher exports to these countries, mostly to South Africa.

Russia. Despite exports to Russia being higher this year, Brazilian exporters are not optimistic about next year’s exports to Russia with the lower oil prices and the current economic situation in Russia. Venezuela. Of all Brazil’s markets Venezuela is the least likely to see improvement and will likely to continue this way next year. Lower oil prices combined with political and economic crises have affected the country’s ability to pay. Source: USDA FAS Gain Report BR0974, August 13, 2015